Wednesday, April 23, 2014

Frequent Fed Failure Foolishness

If you start with the conviction that the Fed can perfectly control the real economy, then any protracted slump is, ipso facto, a Fed failure.

Hence we see blogposts like "This one figure shows why Fed policy failed".

Here's the figure in question:

The blogpost argues (awesomely I might add) that the graph shows failure in two ways. First because the increase in the Fed balance sheet was "temporary".

Now people, let me point out that it is April of 2014. So all the unshaded part of the graph is in the future! And as you can see, the latest projection of when the Fed's balance sheet returns to its pre-crisis trend is in 2021. And it's quite likely that future projections (if anyone is so nuts as to continue to make them) will push this date further into the future.

So the idea that a graph of things that have not happened can show the Fed failed is pretty weak sauce.

And, even if it does go down like that, we are still talking 14 years of super-sized balance sheets as too short a time to get people to "rebalance their portfolios"

The second reason the graph shows failure is because the asset purchases were so large! (I am not making this up).

The blogpost argues that in lieu of actual policy, the Fed should have just credibly committed to policy actions if needed and this would have raised velocity making the required purchases much smaller or even not needed at all:

"Had the Fed credibly committed from the start there never would have been the need for all the subsequent LSAPs."

But of course we know from econ 101 that the Fed cannot credibly commit! To anything, least of all to letting inflation run above its own desired level in order to top up nominal GDP from its recessionary shortfall.

People, repeat after me:

1. Not all recessions are prima facie evidence of Fed policy failures.

2. Not all Fed predictions / projections actually come to pass.

3. When you hear some one telling you all the Fed needs to do is "credibly commit", RUN!

Great Northern Jerky Contest

So, there is a contest to see who can make the best beef jerky.  It's not a cook-off, it's....well, you see.

Some commentary.

Thanks to M. Kaan.

Tuesday, April 22, 2014

Honey Badger Stoffel

Stoffel can't stop, 'cause he won't stop.  At this point, I think he is not going to stop.

Video (I like the way it starts:  "After Stoffel's severe mauling by the lions...."):

Nod to Amy WL


If the Beatles were still together, they might sing, "Happiness is a 3D printed gun."  Or they might not.

But Cody Wilson has some interesting ideas.  It's not clear that the state can control the things it wants to control.

Monday, April 21, 2014

Monday's Child

1.  Two elderly women fly for the first time, ever.  Cute.

2.  On the other hand, this woman...well.  See for yourself.  Or, maybe don't.  DECIDEDLY NSFW,  and an image that you will want very much to unsee.  But it is in keeping with the "women and airplanes" theme.  Amazing that US Airways did that.  WARNING:  Don't look at this, unless you are the sort of person who reads KPC regularly.  This is not a nice thing to look at.

3.  A college degree can still be worth quite a lot.  HOWEVER (Protip):  It helps if you take actual classes, and have an actual major.  If not, you might be a barrista.

4.  Howard Coble has retired.  But he is still WAY more badass than your sorry excuse for a member of Congress.

5.  One word:  en-dog-en-ous.  Children who are doing really well in school, and on tests, don't need their parents to get involved.  Parents worry when little Johnny is doing poorly.  So, bad scores cause parental involvement.  When you ask if parental involvement causes improved test scores, you'll find a (spurious) negative correlation.


Sunday, April 20, 2014

Watch Your Cash

So, I needed some cash when I was in Bratislava.  I spent nearly 10 minutes trying to get cash from this ATM.

But then the bellhop told me it was NOT an ATM, but a parking validation machine.  I suppose the coin slot should have been a tip-off...

Saturday, April 19, 2014

Winnie the Pooh, First Day on the Job. Also LAST Day...

This young woman did not really think through the way the Winnie the Pooh costume was supposed to look.  She likely meant well, but....Well, see for yourself.

Need to be more careful about putting the pants on.  If you put them on backwards, you'll scare the children, and amuse me.   And William H, who was amused enough to send it in.